Online Grocery Shopping: Are Customers Checking Out or In?

Necessity Meets Convenience: A New Age of Supermarket Delivery

Shopping online is now a standard in most modern households. While traditional brick and mortar stores have gradually lost business to web-based companies, there have been some domains that appeared safely reliant on an immediate, in-store experience. Grocery shopping has long been confined to the supermarket because of consumer concerns with product quality and selection. The desire for fresh food and convenient home delivery, however, is quickly becoming a reality that may pose a threat to the local market.

As online grocery shopping becomes more popular, which retailers stand to win in a crowded field, and with what marketing and advertising approaches promise success?

What will drive potential customers right into the aisles of these cyber supermarkets? Using our social media analytics platform ForSight™, we looked at three major online grocery programs – Peapod, FreshDirect, and AmazonFresh – and explored how current and prospective customers are discussing the brands.

From January 1, 2012 to June 18, 2013, ForSight found over 24,000 tweets and Facebook posts related to the three grocery delivery services. Each was examined beyond just basic sentiment, as we analyzed what motivated consumers’ opinions. We found that, though the purpose of the grocery delivery services are fundamentally similar, each customer base had different motives and desires.

Peapod: Convenience

The typical Peapod customer sees the service not so much as a necessity but as a luxury. Their focus lies in the convenience of home delivery, as 37% of users stated that their top reason for using Peapod was to avoid going to the store. Positive discussion was also centered around the store’s rewards program, coupons, and deals.

About 34% voiced negative opinions of the company. The main reasons behind these criticisms were late deliveries, limited windows of delivery times, and forgetting or delivering the wrong items. While Peapod customers enjoy the ease and convenience of the service, poor customer service can easily taint their perception of the brand and drive their business elsewhere.

FreshDirect: Food Quality

While 66% of conversation around Peapod is positive, FreshDirect faces slightly more condemnation as positive and negative sentiment is split at an even 50-50. Though current customers praise FreshDirect for their fresh, natural food, several consumers have taken to social media to call for a boycott of the brand.

The company has been under much scrutiny since they’ve announced their move to the South Bronx. Around a quarter of the conversation (27%) expressed that the government is wasting money supporting FreshDirect’s presence in the South Bronx and that their polluting trucks and unfair wages are unwelcome in the borough.

Social media analysis of the conversation about FreshDirect indicates that a green initiative highlighting the environmental benefits to home delivery services may turn some in their favor, while their fresh products will continue to bring back loyal customers.

Amazon: Product Mix

When it comes to attracting prospective customers, however, Amazon reigns over its competitors. The up-and-coming AmazonFresh has the key benefit of a well-established brand name, as consumers across the US feel a sense of security and trust with the website. This grocery delivery service has been surrounded by a significantly larger amount of hype than the others. 18% of users stated they wanted AmazonFresh in their area, while only 2% wanted Peapod and 3% FreshDirect.

Consumers in Washington who have already used AmazonFresh mainly voiced praise. We found that 75% of conversation around the service is positive, with general enthusiasm leading the discussion. More specifically, 20% of users expressed excitement over the release of new products, including Top Pot Doughnuts and Samuari Noodle. AmazonFresh stands to win with a combination of local favorites and convenient home delivery.

Competitive analysis with Crimson Hexagon’s ForSight social media analytics platform indicates that while the services are similar in design, they offer different advantages and represent different brand attributes to customers. Using ForSight, we are able to identify what drives consumers to one brand over another and what turns a potential shopper into a long term customer.

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In Jorge Luis Borges’ short story The Library of Babel, an infinite expanse of hexagonal rooms filled with books contained every possible arrangement of letters. For every important, beautiful, or useful book in this library there existed endless volumes of gibberish.

The only way to navigate this vast sea of meaningless information was to locate the Crimson Hexagon, the one room that contained a log of every other book in the library—a guide to extracting meaning from all the unstructured information.

Like Borges’ Crimson Hexagon, we aim to be a key to the world of social data, guiding your business and helping you uncover where to go next.